EU AND INTERNATIONAL TAX POLICY – January 2023
Fixed Establishments: unexpected potential VAT liabilities from Intra-Community transactions
A few days ago the Italian Revenue Agency published ruling no. 57 of 2023, concerning the scope of fixed establishments’ “intervention” and its potential application to intra-EU transactions.
Quite surprisingly, the Italian Revenue Agency set aside its previous interpretation (which was also confirmed by the EU Commission in its working paper No. 857 of 6 May 2015), by stating that a fixed establishment may be deemed to be involved not only in supplies of goods and services performed by the foreign head office, but in intra-community transactions as well.
As the interpretation taken by the Italian Revenue Agency in the ruling seems to go beyond the wording of Article 192a of the Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (“VAT Directive”), foreign companies making intra-EU supplies of goods to Italian established or VAT registered customers should be well aware of it and of its potential implications when designing their supply chains.